Trulieve Cannabis Corp

Previous wording

This "Management's Discussion and Analysis of Financial Condition and Results of Operations" of Trulieve Cannabis Corp., together with its subsidiaries ("Trulieve," "the Company," "we," or "our") should be read in conjunction with the accompanying unaudited condensed consolidated financial statements and the related notes included elsewhere within this Quarterly Report on Form 10-Q and the Audited Consolidated Financial Statements and the related Notes thereto and "Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations" contained in our Annual Report on Form 10-K for the fiscal year ended December 31, 2023 (the "2023 Form 10-K").

Current wording

This "Management's Discussion and Analysis of Financial Condition and Results of Operations" of Trulieve Cannabis Corp., together with its subsidiaries ("Trulieve," the "Company," "we," "our," or "us") should be read in conjunction with the accompanying unaudited condensed consolidated financial statements and the related notes included elsewhere within this Quarterly Report on Form 10-Q and the Audited Consolidated Financial Statements and the related Notes thereto and "Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations" contained in our Annual Report on Form 10-K for the fiscal year ended December 31, 2023 (the "2023 Form 10-K").

Previous wording

The Company’s accounting policies that we believe are the most critical to aid in fully understanding and evaluating our reported financial results are described in the Company’s fiscal 2023 Form 10-K, filed with the SEC on February 29, 2024, under the caption “Management’s Discussion and Analysis of Financial Condition and Results of Operations – Critical Accounting Policies and Estimates.” Our senior management has reviewed these critical accounting policies and related disclosures and determined that there were no significant changes in our critical accounting policies during the three months ended March 31, 2024.

Current wording

The Company’s accounting policies that we believe are the most critical to aid in fully understanding and evaluating our reported financial results are described in the Company’s fiscal 2023 Form 10-K, filed with the SEC on February 29, 2024, under the caption “Management’s Discussion and Analysis of Financial Condition and Results of Operations – Critical Accounting Policies and Estimates.” Our senior management has reviewed these critical accounting policies and related disclosures and determined that there were no significant changes in our critical accounting policies during the six months ended June 30, 2024.

Previous wording

Trulieve is a vertically integrated cannabis company and multi-state operator which currently holds licenses to operate in nine states. Headquartered in Quincy, Florida, we are the largest cannabis retailer in the United States with market leading retail operations in Arizona, Florida, Georgia, Pennsylvania, and West Virginia. We are committed to delivering exceptional customer experiences through elevated service and high-quality branded products. We aim to be the brand of choice for medical and adult-use customers in all of the markets that we serve. The Company operates in highly regulated markets that require expertise in cultivation, manufacturing, and retail. We have developed proficiencies in each of these functional areas and are passionate about expanding access to regulated cannabis products through advocacy, education and expansion of our distribution network.

Current wording

Trulieve is a vertically integrated cannabis company and multi-state operator with operations in nine states. Headquartered in Quincy, Florida, we are the largest cannabis retailer in the United States with market leading retail operations in Arizona, Florida, Georgia, Pennsylvania, and West Virginia. We are committed to delivering exceptional customer experiences through elevated service and high-quality branded products. We aim to be the brand of choice for medical and adult-use customers in all of the markets that we serve. The Company operates in highly regulated markets that require expertise in cultivation, manufacturing, and retail. We have developed proficiencies in each of these functional areas and are passionate about expanding access to regulated cannabis products through advocacy, education and expansion of our distribution network.

Previous wording

Trulieve produces high quality cannabis flower for direct consumption and uses a variety of processes to transform high-quality biomass into products sold through our retail and wholesale distribution network. With a focus on replicable, scalable operations, we have developed design standards, standard operating procedures, and training protocols that are employed across cultivation sites to achieve a high level of consistency and quality. The modular nature of our standard designs enables quick and incremental additions to capacity where appropriate. In Florida where demand is high enough to support larger scale production, our recently ramped state-of-the-art 750,000 square foot indoor cultivation facility affords us greater flexibility for pricing, promotional cadence, and assortment in the Florida market by enabling production of high potency and high quality products at lower costs.

Current wording

Trulieve produces high quality cannabis flower for direct consumption and uses a variety of processes to transform high-quality biomass into products sold through our retail and wholesale distribution network. With a focus on replicable, scalable operations, we have developed design standards, standard operating procedures, and training protocols that are employed across cultivation sites to achieve a high level of consistency and quality. The modular nature of our standard designs enables quick and incremental additions to capacity where appropriate. In Florida where demand is high enough to support larger scale production, our state-of-the-art 750,000 square foot indoor cultivation facility affords us greater flexibility for pricing, promotional cadence, and assortment in the Florida market by enabling production of high potency and high quality products at lower costs.

Previous wording

We utilize various extraction techniques including supercritical ethanol extraction, carbon dioxide extraction, hydrocarbon extraction, and mechanical separation. We have invested in light hydrocarbon extraction processes, allowing for concentrates that preserve the natural ratios of cannabinoids, terpenes, and other target compounds to better replicate the flower experience. Light hydrocarbon extraction also offers the benefit of greater extraction yields in many cases. In addition, we own CO2 extraction, distillation, purification and manufacturing technology used to produce a line of cannabis topicals and vapes featuring cannabinoids.

Current wording

We utilize various extraction techniques including supercritical ethanol extraction, carbon dioxide extraction, hydrocarbon extraction, and mechanical separation. We have invested in light hydrocarbon extraction processes, allowing for concentrates that preserve the natural ratios of cannabinoids, terpenes, and other target compounds to better replicate the flower experience. Light hydrocarbon extraction also offers the benefit of greater extraction yields in many cases. In addition, we own CO 2 extraction, distillation, purification and manufacturing technology used to produce a line of cannabis topicals and vapes featuring cannabinoids.

Previous wording

We regularly engage with various communities who may benefit from cannabis, such as veterans, seniors, organizations that serve qualifying populations, and various health and wellness groups. Search engine optimization of our website also captures potential customers researching the benefits of cannabis, which offers another pathway to informative materials about cannabis, our products and how to legally access them.

Current wording

We regularly engage with various communities who may benefit from cannabis, such as veterans, seniors, organizations that serve qualifying populations as well as various health and wellness groups. Search engine optimization of our website also captures potential customers researching the benefits of cannabis, which offers another pathway to informative materials about cannabis, our products and how to legally access them.

Previous wording

We understand each consumer has unique communication preferences and capabilities. As such, we engage with customers and physicians through a variety of methods including email, text, social media and online chat. In select markets we offer various purchase options, including phone ordering, online ordering, home delivery, and in-store. As Trulieve continues to expand, we are working to deploy a standardized loyalty program to serve all markets as appropriate within existing regulatory frameworks.

Current wording

We understand each consumer has unique communication preferences and capabilities. As such, we engage with customers and physicians through a variety of methods including email, text, social media and online chat. In select markets we offer various purchase options, including phone ordering, online ordering, home delivery, and in-store. As Trulieve continues to expand, we have developed a standardized loyalty program to serve all markets as appropriate within existing regulatory frameworks, and this new program was completed in all markets in the second quarter of 2024. The program features fully stackable points which can be redeemed across all of our brands and markets. The rewards program itself was built inside of our customer data platform, allowing interconnectivity between rewards, website, and the customer data platform.

Previous wording

We face additional competition from new entrants. If the number of consumers of medical and adult-use cannabis in our markets increases, the demand for products will increase and we expect that competition will become more intense, as current and future competitors begin to offer an increasing number of diversified products. We expect to continue to invest in several areas, including customer experience, product innovation, scaled production, marketing and branding, and distribution network expansion. Trulieve may not have sufficient resources to maintain investments on a competitive basis, which could materially and adversely affect our business, financial condition and results of operations. The management team monitors developments in the fast-paced cannabis industry and adjacent industries to help us remain competitive.

Current wording

We face additional competition from new entrants. If the number of consumers of medical and adult-use cannabis in our markets increases, the demand for products will increase and we expect that competition will become more intense, as current and future competitors begin to offer an increasing number of diversified products. We expect to continue to invest in several areas, including customer experience, product innovation, scaled production, marketing and branding, and distribution network expansion. Trulieve may not have sufficient resources to maintain investments on a competitive basis, which could have a material adverse effect on our business, financial condition and results of operations. The management team monitors developments in the fast-paced cannabis industry and adjacent industries to help us remain competitive.

Previous wording

This section of this Form 10-Q generally describes and compares our results of continuing operations for the three months ended March 31, 2024 and 2023, except as noted.

Current wording

This section of this Form 10-Q generally describes and compares our results of continuing operations for the three and six months ended June 30, 2024 and 2023.

Previous wording

Sales and marketing expense for the three months ended March 31, 2024 was $61.1 million, an increase of $0.4 million, or 0.6%, from $60.7 million for the three months ended March 31, 2023. The increase is primarily due to the increase in overall store count partially offset by payroll efficiencies. Sales and marketing expense as a percentage of revenues was 20.5% for the three months ended March 31, 2024 compared to 21.3% for the three months ended March 31, 2023.

Current wording

Sales and marketing expense for the three months ended June 30, 2024 was $63.2 million, an increase of $2.1 million, or 3.4%, from $61.1 million for the three months ended June 30, 2023. The increase is primarily due to the increase in overall store count. Sales and marketing expense as a percentage of revenues was 20.8% for the three months ended June 30, 2024, compared to 21.7% for the three months ended June 30, 2023. The decrease in the percentage of revenue is driven by cost improvements from retail payroll efficiencies as well as overall increases in same store revenue.

Previous wording

Interest income for the three months ended March 31, 2024 was $3.3 million, an increase of $2.2 million, or 206.8%, from $1.1 million for the three months ended March 31, 2023. The increase is due to an increase in funds invested into high-yield money market fund accounts in the first quarter of 2024 compared to the same prior year period.

Current wording

Interest income for the three months ended June 30, 2024 was $4.0 million, an increase of $2.7 million, or 202.8%, from $1.3 million for the three months ended June 30, 2023. The increase is due to an increase in funds available to be invested into high-yield money market fund accounts compared to the same prior year period.

Previous wording

Cost of goods sold for the three months ended March 31, 2024 was $123.8 million, a decrease of $11.2 million, or 8.3%, from $135.0 million for the three months ended March 31, 2023. Cost of goods as a percentage of revenue was 41.6% for the three months ended March 31, 2024 compared to 47.3% for the three months ended March 31, 2023. The decrease was primarily due to improvements driven by year over year improvements in at-scale cost efficiencies from our 750,000 square foot production facility in Florida.

Current wording

Cost of goods sold for the six months ended June 30, 2024 was $245.6 million, a decrease of $29.6 million, or 10.7%, from $275.2 million for the six months ended June 30, 2023. Cost of goods as a percentage of revenues was 40.9% for the six months ended June 30, 2024 compared to 48.5% for the six months ended June 30, 2023. The decrease was primarily due to year over year improvements in at-scale cost efficiencies from our production facilities.

Previous wording

Gain on impairment and disposal of long-lived assets, net of recoveries was $1.4 million for the three months ended March 31, 2024, a change of $4.7 million, from a loss of $3.4 million for the three months ended March 31, 2023. The change is primarily due to 2023 asset disposal activities associated with underperforming assets, offset by insurance recoveries received in the first quarter of 2024 associated with property damage in 2023.

Current wording

Impairment and disposal of long-lived assets, net of recoveries for the six months ended June 30, 2024 was a gain of $0.1 million, a decrease of $6.8 million, from a loss of $6.7 million for the six months ended June 30, 2023. The change was primarily due to 2023 asset disposal activities associated with underperforming assets where 2024 included impairment charges related to assets moved to held for sale which were offset by insurance recoveries received in the first quarter of 2024 associated with property damage in 2023.

Previous wording

Interest expense, net for the three months ended March 31, 2024 was $14.7 million, a decrease of $6.5 million, or 30.7%, from $21.2 million for three months ended March 31, 2023. The decrease is primarily the result of debt retirements of $57.0 million in September 2023 and $130.0 million in December 2023 driving lower interest expense realized in the first quarter of 2024, partially offset by the interest associated with the $25.0 million mortgage note executed in December 2023.

Current wording

Interest expense, net for the six months ended June 30, 2024 was $30.1 million, a decrease of $10.0 million, or 24.9%, from $40.1 million for six months ended June 30, 2023. The decrease is primarily the result of debt retirements with $57 million of debt retired in September 2023 and $130.0 million of debt retired in December 2023 driving lower interest expense in the first six months of 2024. This favorability was partially offset by interest associated with the $25.0 million mortgage note executed in December 2023.

Previous wording

Other expense, net for the three months ended March 31, 2024 was $2.7 million, a change of$6.9 million, from other income, net of$4.1 million for three months ended March 31, 2023. The change is primarily related to expense from credit loss reserves on non-operating notes receivable in the current year, compared to gains related to non-operating assets in the prior year.

Current wording

Other expense, net for the six months ended June 30, 2024 was $4.6 million, a decrease of $9.3 million, from other income, net of $4.7 million for six months ended June 30, 2023. The decrease is primarily a result of the provision for credit losses recorded on non-operating notes receivable in the current year, compared to gains recognized on sales of non-operating assets in the prior year.

Previous wording

The provision for income taxes for the three months ended March 31, 2024 was$55.4 million, an increase of$20.0 million, or 56.3%, from$35.5 million for the three months ended March 31, 2023. Provision forincome taxes as a percentage of revenue was 18.6% for the three months ended March 31, 2024 compared to 12.4% for the three months ended March 31, 2023. The increase in tax expense in the first quarter of 2024 was driven by an increase in gross margin for the period, as well as the one-time impact of changing certain state tax filing methods which requires us to revalue deferred taxes in those states, and an increase in interest expense on uncertain tax positions.

Current wording

The provision for income taxes for the six months ended June 30, 2024 was $102.6 million, an increase of $33.3 million, or 48.1%, from $69.3 million for the six months ended June 30, 2023. The provision for income taxes as a percentage of gross profit was 28.9% for the six months ended June 30, 2024, compared to 23.7% for the six months ended June 30, 2023. The increase in tax expense for 2024 was driven by an increase in gross profit for the period, the one-time impact of changing certain state tax filing methods which requires us to revalue deferred taxes in those states, and an increase in interest expense on uncertain tax positions.

Previous wording

Our management uses a financial measure that is not in accordance with generally accepted accounting principles in the U.S., or GAAP, in addition to financial measures in accordance with GAAP to evaluate our operating results. This non-GAAP financial measure should be considered supplemental to, and not a substitute for, our reported financial results prepared in accordance with GAAP. Adjusted EBITDA is a financial measure that is not defined under GAAP. Our management uses this non-GAAP financial measure and believes it enhances an investor’s understanding of our financial and operating performance from period to period because it excludes certain material non-cash items and certain other adjustments management believes are not reflective of our ongoing operations and performance. Adjusted EBITDA adjusts the following items from net income: interest expense, provision for income taxes, and depreciation and amortization to arrive at EBITDA. This is then adjusted for items that do not represent the operations of the core business such as acquisition, transaction and other non-recurring costs including contributions to specific initiative campaigns (e.g., Smart and Safe Florida), impairments and disposals of long-lived assets including goodwill, discontinued operations, share-based compensation, and other income and expense items. Acquisition, transaction and non-recurring costs also may include expenditures related to major system changes.

Current wording

Our management uses a financial measure that is not in accordance with generally accepted accounting principles in the U.S., or GAAP, in addition to financial measures in accordance with GAAP to evaluate our operating results. This non-GAAP financial measure should be considered supplemental to, and not a substitute for, our reported financial results prepared in accordance with GAAP. Adjusted EBITDA is a financial measure that is not defined under GAAP. Our management uses this non-GAAP financial measure and believes it enhances an investor’s understanding of our financial and operating performance from period to period because it excludes certain material non-cash items and certain other adjustments management believes are not reflective of our ongoing operations and performance. Adjusted EBITDA adjusts the following items from net income: interest expense, interest income, provision for income taxes, and depreciation and amortization to arrive at EBITDA. This is then adjusted for items that we do not believe represent the operations of the core business such as acquisition, transaction and other non-recurring costs including major system changes as well as contributions to specific initiatives (e.g., contributions to Smart and Safe Florida), impairments and disposals of long-lived assets including goodwill, discontinued operations, share-based compensation, and other income and expense items.

Previous wording

We report Adjusted EBITDA to help investors assess the operating performance of the Company’s business. The financial measures noted above are metrics that have been adjusted from the GAAP net income measure in an effort to provide readers with a normalized metric in making comparisons more meaningful across the cannabis industry, as well as to remove non-recurring, irregular and one-time items that may otherwise distort the GAAP net income measure.

Current wording

We report Adjusted EBITDA to help investors assess the operating performance of the Company’s business. The financial measure noted above is a metrics that has been adjusted from the GAAP net income measure in an effort to provide readers with a normalized metric in making comparisons more meaningful across the cannabis industry, as well as to remove non-recurring, irregular and one-time items that may otherwise distort the GAAP net income measure.

Previous wording

Adjusted EBITDA for the three months ended March 31, 2024 was $105.8 million, an increase of $27.7 million, or 35.5%, from $78.1 million for the three months ended March 31, 2023. The increase is primarily attributable to the increase in revenue and improved gross profit margin.

Current wording

Adjusted EBITDA for the three months ended June 30, 2024 was $107.0 million, an increase of $28.3 million, or 35.9%, from $78.7 million for the three months ended June 30, 2023. The increase is primarily attributed to increased revenue and improved gross profit.

Previous wording

Since our inception, we have funded our operations and capital spending through cash flows from product sales, third-party debt, proceeds from the sale of our capital stock and loans from affiliates and entities controlled by our affiliates. We are generating cash from sales and are deploying our capital reserves to acquire and develop assets capable of producing additional revenues and earnings over both the immediate and near term to support our business growth and expansion. Our current principal sources of liquidity are our cash and cash equivalents provided by our operations and debt and equity offerings. The Company has and expects to retain additional cash from operations, starting in the third quarter of 2023, due in part to the Company's position that it does not owe taxes attributable to the application of Section 280E of the Internal Revenue Code. Cash and cash equivalents consist primarily of cash on deposit with banks and money market funds.

Current wording

Since our inception, we have funded our operations and capital spending through cash flows from product sales, third-party debt, proceeds from the sale of our capital stock and loans from affiliates and entities controlled by our affiliates. We are generating cash from operations and are deploying our capital reserves to acquire and develop assets capable of producing additional revenues to support our expected business growth. Our current principal sources of liquidity are our cash and cash equivalents provided by our operations as well as debt and equity offerings. The Company has and expects to retain additional cash from operations, due in part to the Company's position that it does not owe taxes attributable to the application of Section 280E of the Internal Revenue Code. Cash and cash equivalents consist primarily of cash on deposit with banks and money market funds.

Previous wording

Our primary uses of cash are for working capital requirements, capital expenditures, debt service payments, and income tax payments. Additionally, from time to time, we may use capital for other investing and financing activities. Working capital is used principally for our personnel as well as costs related to the growth, manufacture and production of our products. Our capital expenditures consist primarily of additional facilities and dispensaries, and improvements to existing facilities. Our debt service payments consist primarily of interest payments.

Current wording

Our primary uses of cash are for working capital requirements, capital expenditures, debt service payments, and income tax payments. Additionally, from time to time, we may use capital for other investing and financing activities. Working capital is used principally for our personnel expenses as well as costs related to the cultivation, processing and distribution of our products. Our capital expenditures consist primarily of additional cultivation and processing facilities and retail dispensaries, and improvements to existing facilities to support the expected long-term growth in markets with adult-use catalysts. In the current period, our debt service payments consist primarily of interest payments.

Previous wording

Cash and cash equivalents were $320.3 million as of March 31, 2024. We believe our existing cash balances will be sufficient to meet our anticipated cash requirements from the date of this Quarterly Report on Form 10-Q through at least the next 12 months. Any additional future requirements will be funded through the following sources of capital:

Current wording

Cash and cash equivalents were $355.2 million as of June 30, 2024. We believe our existing cash balances will be sufficient to meet our anticipated cash requirements from the date of this Quarterly Report on Form 10-Q through at least the next 12 months. Any additional future requirements would likely be funded through the following sources of capital:

Previous wording

Net cash provided by operating activities was $139.2 million for the three months ended March 31, 2024, an increase of $138.7 million as compared to $0.4 million net cash provided by operating activities during the three months ended March 31, 2023. This improvement is primarily due to the impact of the Company's position that it does not owe taxes attributable to the application of Section 280E of the Internal Revenue Code as well as a $23.6 million improvement in gross profit driven by higher revenues and improved gross margin.

Current wording

Net cash provided by operating activities was $210.5 million for the six months ended June 30, 2024, an increase of $233.5 million as compared to $23.1 million net cash used in operating activities for the six months ended June 30, 2023. This improvement is primarily due to the $169.8 million impact from the Company's position that it does not owe taxes attributable to the application of Section 280E of the Internal Revenue Code (inclusive of $52.4 million in refunds received from amended returns based on this position in the first half of this fiscal year) and a $63.6 million improvement in gross profit driven by higher revenues and improved gross margin, which was only partially offset by the comparative change in inventories. Operating cash flows in the comparative period benefited from the $40.3 million decrease in inventories versus the $5.0 million decrease for the current period.

Previous wording

Net cash used in investing activities was $19.0 million for the three months ended March 31, 2024, an increase of $0.2 million, compared to the $18.8 million net cash used in investing activities for the three months ended March 31, 2023. The change is primarily from increased purchases of internal use software and property equipment in the current year, which was partially offset by non-recurring payments for a cannabis license made in the prior year.

Current wording

Net cash used in investing activities was $51.9 million for the six months ended June 30, 2024, an increase of $26.6 million, compared to the $25.3 million net cash used in investing activities for the six months ended June 30, 2023. The increase primarily reflects higher current year purchases of property, plant and equipment and internal use software to support the expected profitable long-term growth of the business. A reduction in proceeds received this year compared to the same prior year period from the sale of long-lived and held for sale assets, partially offset by non-recurring payments for a cannabis license made in the prior year also contributed to the increase in net cash used in investing activities for the current period.

Previous wording

Net cash used in financing activities was $1.6 million for the three months ended March 31, 2024, a change of $4.3 million, compared to the $5.8 million net cash used in financing activities for the three months ended March 31, 2023. The change is primarily due to proceeds from a redeemable non-controlling interest holder making a subscription payment in the current year and a note payable that was paid off in the prior year.

Current wording

Net cash used in financing activities was $10.7 million for the six months ended June 30, 2024, an increase of $1.4 million, compared to $9.3 million net cash used in financing activities for the six months ended June 30, 2023. The increase is driven primarily from the payment made for the consolidated VIE settlement transaction and the related costs incurred, which was partially offset by proceeds from the redemption of non-controlling interest and a decrease in payments made on notes payable as a note was paid off in the prior year.

Previous wording

As of March 31, 2024 and December 31, 2023, 100% of our condensed consolidated balance sheet is exposed to U.S. cannabis-related activities, and substantially all our revenue is from U.S. cannabis operations. We believe our operations are in material compliance with all applicable state and local laws, regulations, and licensing requirements in the states in which we operate. However, cannabis remains illegal under U.S. federal law. For information about risks related to U.S. cannabis operations, please refer to the “Risk Factors” section of this Quarterly Report on Form 10-Q and "Part I, Item 1A - Risk Factors" in our 2023 Form 10-K.

Current wording

As of June 30, 2024 and December 31, 2023, 100% of our condensed consolidated balance sheets is exposed to U.S. cannabis-related activities, and substantially all our revenue is from U.S. cannabis operations. We believe our operations are in material compliance with all applicable state and local laws, regulations, and licensing requirements in the states in which we operate. However, cannabis remains illegal under U.S. federal law. For information about risks related to U.S. cannabis operations, please refer to the “Risk Factors” section of this Quarterly Report on Form 10-Q and "Part I, Item 1A - Risk Factors" in our 2023 Form 10-K.

Previous wording

For information on our commitments for financing arrangements, claims and litigation, contingencies, and other obligations, see Note 3. Supplementary Financial Information, Note 4. Financing Arrangements, and Note 6. Income Taxes in Part I. Item 1 of this Quarterly Report on Form 10-Q. Other than the increase in our uncertain tax liabilities of $97.6 million, there were no other material changes to our contractual obligations as set forth in Part II Item 7 of our 2023 Annual Report on Form 10-K for the year ended December 31, 2023.

Current wording

For information on our commitments for financing arrangements, operating leases, claims and litigation, contingencies, and other obligations, see Note 3. Supplementary Financial Information, Note 4. Financing Arrangements, and Note 6. Income Taxes in Part I. Item 1 of this Quarterly Report on Form 10-Q. Other than the $152.8 million increase in our uncertain tax position liabilities and the $19.0 million increase in our future minimum lease payments under non-cancellable operating leases, there were no other material changes to our contractual obligations as set forth in Part II Item 7 of our 2023 Annual Report on Form 10-K for the year ended December 31, 2023.